Judgment summary
This is a request for a preliminary ruling made by the Bundesfinanzhof (Federal Fiscal Court, Germany) concerning the interpretation of the first sentence of the first paragraph of Article 13 of Protocol (No 7) on the privileges and immunities of the European Union (1). The request arose in proceedings between A, a member of staff of the European Investment Bank (EIB), and the Finanzamt B (Tax Office, Germany), concerning the payment of gift tax in Germany (2).
The Court held, first, that the first sentence of the first paragraph of Article 13 of Protocol No 7 must be interpreted as applying to a tax on gifts (57). Second, it held that an official or other servant of the European Union who, in order to perform his or her duties, established residence in a Member State other than the State of origin, but who subsequently moved, for personal reasons, to a further Member State other than that in which duties are performed, maintains domicile for tax purposes in the State of origin (81).
Background
A has been a member of staff of the EIB since 1995, when he moved his residence from Austria to Luxembourg to take up his duties at that body (15).
After his marriage in 2010, he moved again to live with his spouse in Germany, while continuing to use his flat in Luxembourg (15).
In 2013, he received a gift of EUR 300 000 from his brother, who resides in Austria (16). By decision of 13 April 2017, the German tax authority set the gift tax payable by A at EUR 56 000 (17).
A's administrative appeal, in which he relied on the first sentence of the first paragraph of Article 13 of Protocol No 7 and argued he should be treated as domiciled for tax purposes exclusively in Austria, was rejected on 1 August 2019. The tax authority found that A had established an additional domicile for tax purposes in Germany alongside a domicile in Austria, that the Austrian domicile was fictitious, and that A was subject to unlimited gift tax liability in Germany (18).
By judgment of 16 September 2021, the Finanzgericht Rheinland-Pfalz (Fiscal Court, Rhineland-Palatinate) upheld A's action, holding that the criterion in Article 13 relating to the reason for establishing residence had to be assessed at the date of entry into EU service, and that subsequent personal-reason moves were irrelevant as long as the staff member remained employed by the EU and actual residence retained a geographical link to the place of duty (19).
The tax authority brought an appeal on a point of law (Revision) before the Bundesfinanzhof, arguing that Article 13 does not apply to gift tax and, in any event, is not relevant where a servant establishes an additional residence in another Member State for personal reasons after taking up duties (20). The Bundesfinanzhof decided by decision of 20 November 2024, received at the Court on 9 April 2025, to refer questions to the Court of Justice.
Core dispute
The referring court asked, first, whether the first sentence of the first paragraph of Article 13 of Protocol No 7 applies to the levying of gift tax, since gift tax is not expressly mentioned alongside income tax, wealth tax and death duties (23, 24, 31).
Second, in the event that Article 13 applies to gift tax, the referring court asked whether that provision precludes an official who established residence in a Member State other than his State of origin solely by reason of performing EU duties from establishing an additional domicile for tax purposes in a further Member State other than the one in which duties are performed, where he retains a de facto domicile in the State of performance of duties (27, 28).
Court findings
On the first question, the Court held that the concepts of income tax, wealth tax and death duties in the first sentence of the first paragraph of Article 13 of Protocol No 7 are autonomous concepts of EU law, to be interpreted uniformly irrespective of national characterisation (40). Although gift tax is not expressly listed, it shares essential features with both death duties and income tax, since it is imposed on the gratuitous transfer of assets or the enrichment resulting from such a transfer (41).
Excluding gift tax from the scope of the provision would create two domiciles for tax purposes for officials and other servants, would introduce uncertainty and risk of double taxation disputes, and would undermine the objective of simple and predictable determination of tax situations (45 to 47). It would also be contrary to the principle, under Article 17 of Protocol No 7, that privileges are neutral as between the interests of officials and Member States, and would create a risk that death duties could be circumvented by way of a gift (48 to 55).
On the second question, the Court found that the provision uses the term domicile for tax purposes in the singular, so officials and other servants are deemed to maintain only one domicile for tax purposes, in their State of origin; A could not therefore have an additional domicile for tax purposes in Germany (61, 62).
The Court reformulated the second question to ask whether an official who established residence in a Member State other than the State of origin in order to perform duties, but who later moved for personal reasons to a further Member State other than that of performance of duties, maintains domicile for tax purposes in the State of origin (65). The Court held that the reason for establishing residence, namely performance of duties, must not be read as allowing an official to escape the provision merely by moving residence, for personal reasons, to a Member State other than that of performance of duties, since domicile for tax purposes cannot depend on the volition of the person concerned (70 to 72). This interpretation also serves the objective of simple and predictable determination of the tax situation of officials and other servants (73, 78).
Outcome
The Court ruled that the first sentence of the first paragraph of Article 13 of Protocol (No 7) on the privileges and immunities of the European Union must be interpreted as applying to a tax on gifts (ruling 1).
The Court further ruled that the same provision must be interpreted as meaning that an official or other servant of the European Union who, in order to perform his or her duties, established residence in a Member State other than the State of origin, but who subsequently moved, for personal reasons, residence to a Member State other than that in which duties are performed, maintains domicile for tax purposes in the State of origin (ruling 2).
Costs were left to be determined by the referring court (82).
Major issues / areas of contention
- Whether the first sentence of the first paragraph of Article 13 of Protocol (No 7) applies to gift tax, despite that tax not being expressly listed alongside income tax, wealth tax and death duties.
- Whether the concepts of income tax, wealth tax and death duties under Article 13 are autonomous EU law concepts or depend on national law definitions.
- Whether an EU official or servant can have more than one domicile for tax purposes under Article 13.
- Whether a subsequent, personal-reason relocation to a Member State other than that where duties are performed alters the official's domicile for tax purposes under Article 13.